The ETF provider behind a lineup of six revenue-weighted funds launches a payout ETF.
RevenueShares is launching on Wednesday the RevenueShares Ultra Dividend Fund (RDIV) in an attempt to offer a new income-rich option in an environment of persistent low-interest rates.
With bond yields still at historical lows, and the Federal Reserve’s recent no-tapering announcement, using dividend-paying equities as a yield-replacement strategy continues to be a major investment theme for investors in 2013 as it was in 2012.
RDIV is based on the RevenueShares Ultra Dividend Index, a dividend- and revenue-weighted slice of the benchmark index, the S&P 900—a combination of the S&P 500 and the S&P MidCap 400. The Ultra Dividend Index, which seeks to outperform the S&P 900, is made up of 60 securities with the highest average quarterly dividend yields over the past 12 months, which are then reweighted according to the company’s revenues, the fund’s prospectus said.
The index is rebalanced and reconstituted quarterly according to revenue weightings as of the previous quarter.
The fund has net annual fees of 0.49 percent, or $49 for every $10,000 invested.
RevenueShares’ latest ETF will join a roster of at least 30 other U.S. dividend-focused funds, all of which seek to slice and dice the segment of dividend-paying stocks to find sources of income for investors currently grappling with paltry yields in much of the traditional fixed-income space.
Assets in U.S. high-dividend-yielding funds currently total about $57 billion, according to data compiled by IndexUniverse.
The firm has also filed for an emerging market fund, dubbed the RevenueShares Emerging Market Fund, to target expected outsized growth in emerging markets, thanks in part to the Fed’s current bond-buying program as well as demographic forces that are fueling growth.